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China 15, Africa 14, India 12, Asia 8, Yorkshire 5, Indonesia 3, England 3, Ecb 3, Ducati 3, Dragon Spring Village 2, Jeffrey Sachs 2, Earth Institute 2, Asian 2, Ashwani Singla 1, Un Millennium Project 1, Bmw Motorrad 1, Bmw 1, Harley-davidson 1, Yorkshireso 1, Harley Davidson 1,
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  WHUT    BBC Newsnight    News/Business.  (Stereo)  

    July 10, 2011
    8:00 - 8:30am EDT  

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>>reporter: this week on world business... >>with growing demand and declining rural populations, food security in china is becoming a serious issue. >>in the second part of our interview with director of the earth institute - jeffrey sachs we look at the need to decouple economic growth from carbon consumption. >>if we continue to use carbon through fossil fuels and deforestation the way we are right now. we will wreck the climate and we will wreck the oceans. >>reporter: and big brand bikes mean business in india, as demand for luxury two wheelers revs up >>i walked into the mall and they had this showroom, i saw the bikes and i knew i had to get one.
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>>reporter: hello and welcome. i'm raya abirached and this is world business, your weekly insight into the global business trends shaping our lives. three decades of urbanization and economic reforms have lifted hundreds of millions of chinese out of poverty. the big concern now is how to keep feeding them. changing diet, increasing demand and tightening supply threaten the country's food security. it's a delicate balancing act and one that has implications for commodity markets worldwide. >>reporter: dragon spring village, in the hills above chongqing - where li xingming's family has worked the fields since the 19th century.
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>>before, our village never planted vegetables, only rice. now, we grow vegetables and we grow less rice, we just grow what we need. >>reporter: this growing and changing demand is coming from china's ever expanding cities - where some 300 million up-and-coming urbanites - like liu min's family - expect much more than traditional staples like corn and rice. >>my family, like others, has more meat, not too much though - and we buy more dairy products, as well as vegetables, and eggs. >>reporter: but there's also more food inflation - with prices up 17 percent year on year. and with a more varied and improved diet comes other supply chain stress - as animals need feeding too. >>it's an unusual pressure. those kind of products rely on grain for animal feed. and so it changes the equation. you get now a much higher demand for corn
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and for soya beans for animal feed here. which is very different to the traditional diet. >>reporter: since the 1990's, pork consumption has doubled and chicken demand quadrupled. >>this has resulted in a hunger for imports. >>last year, purchases of corn from the us increased 18 fold; and china is by far the world's biggest customer for soybeans. the markets are watching carefully. >>the import of soybeans is around 50 million tons. the global market has already accepted this. so,i think it's impossible to have too much price fluctuation. and, china imports over a million tons of corn - and the global market has already factored this in. >>reporter: but increased demand - notably from china's pig and poultry industries - could well drive prices up. >>china must also import other crops to supplement domestic
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harvests. in 2010, rice imports were up over 10 percent, year-on-year, at almost 340,000 tons; while shipments of wheat rose 36 percent to over a million tons. >>to feed the population, however, china is almost self-sufficient in most basics - for now. it holds over 150 million tons in grain reserves - a third of the county's annual grain consumption. but the nation - which has to feed a fifth of the world's population on a tenth of its arable land - is ata watershed. china is expected to be more and more reliant on supplies from abroad - as the optionsfor increasing domestic production are limited. >>reporter: urbanisation - through building and pollution - has reduced the amount of available arable land to danger levels. >>and urbanisation has drawn the younger, more able bodied away from the countryside. >>in dragon spring village,
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no one under 50 farms the fields. >>it poses the question, when the likes of mr li can work no more, who'll grow all the food? >>china is also prone to other hazards, from floods to landslides to drought. this year has wreakeddevastation on some key regions' wheat, corn and rice harvests and, as a consequence, prices have shot up. >>urbanisation and natural disasters aside, china's big agri-food players - with huge economies of scale - are at the forefront of securing the nation's food supplies; investing heavily in boosting yields, from seed technology to mechanisation. >>by promoting the use of technology and standardisation to improve our output, and to guarantee produce security, we can provide good, safe, nutritional agricultural produce for all. >>reporter: food is also now part of china's strategic overseas investment strategy - alongside mining and hi-tech.
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>>beidahuang plans to invest over a billion dollars in argentina - to develop corn, soybean and vegetable farms - so help guarantee china's future food supplies. >>other chinese land and food resource investments elsewhere in asia are under discussion. >>i think china's food security depends on our own efforts and there are some chinese food companies; but after all, we have over 2 trillion dollars in foreign exchange reserves. now, we're in a situation where we have capital for investing overseas. >>reporter as china reformed and opened-up, it changed the world of manufacturing. now, a more prosperous chinais changing the dynamics and economics of food supplies - at home and abroad. >>reporter: last week we also spoke to jeffrey sachs,
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director of the earth institute about that growing global problem of food security and rising prices. professor sachs was also director of the un millennium project so when eckart sager sat down with him at the world economic forum on east asia,he took the opportunity to get his take whether the region was attaining the millennium developmentgoals. >>asia's on track for reducing income poverty, in fact it's the champion of getting income poverty down. but when it comes to the health outcomes, to under nutrition, and to sanitation and other aspects of the environment; asia's not fully on track yet. it hasn't turned this wondrous growth machine into the other two bottom lines; the social bottom line and the environmental bottom line. we have to understand that we are in a new world where gnp is not enough. we are in a triple bottom line world
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where we need income progress, we need social progress, we need health and education and nutrition, and we need environmental sustainability. it's the triple bottom line that we have to judge the performance of our economies. asia's doing super on the economic side; it's starting to make investments in the social and in the environmental side that are closer to being on power with its economic progress but it needs to do more. >>is it possible to actually uncouple, de-couple an entire economy from carbon consumption? >>the whole world needs to move to a de-carbonised economy for simple reason. if we continue to use carbon through fossil fuels and deforestation the way we are right now; we will wreck the climate and we will wreck the oceans. because even apart from the climate change, the carbon dioxide in the air is making the oceans more
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acidic, and that will destroy the marine ecosystems. we don't have a choice; we have to do this de-coupling. fortunately, things like solar power are so amply available; thousands more... amount of power in solar radiation than we use in our societies, but we need to tap it effectively. solar power, wind power, responsible use of biomass, and responsible use of primary energy sources; geo-thermal energy and others. all of this has to become part of the mix. >>you actually just came back from nigeria; you're very involved of course in africa. what is reallythe potential of africa, with regards of sources of labour or natural resources, they call africa the sleeping giant; but will it ever wake up?
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>>of course it was once thought that asia was forever going to be somnolent and impoverished and asia definitely woke up and became the centre of the world economic growth. africa needs to do the same, can do the same. africa's growth right now is not at asian levels, but it's rising. africa's growth is now at about 6 percent per year; it's really the best since independence half a century ago. asia's success is translating into african economic growth; so we're seeing a kind of re-constituting of indian ocean trade i call it. linking east asia, south asia, east africa, and actually west africa as well. africa has lots of natural resources, it's got great agricultural potential, it's got a lot of poverty; it needs to start speeding up which it's doing, but there's a lot
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of fragility. one should understand also africa will definitely play a larger role in the world simply by the fact of demography; the share of africa in the world's total population and in the world's economy will grow and asia's first to recognise that in a serious way because there's lots of asian investment going into africa right now. that's what's giving africa a lift; i think africa could make a takeoff out ofpoverty. but when you talk about fragility of the natural environment you've got to rank africa wayup there; heat stress, drought vulnerability, loss of vital habitat. africa faces all of those challenges. >>and lastly, since we're in indonesia. you've written a paper; 'the curse of natural resources'. here we are in indonesia; a country full of natural resources. i think you're fairly bullish on indonesia, but this country is also exporting iron ore which is turned into metals and aluminium. in china,
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exports rubber which is turned into tyres. in korea, gas and oil which is processed in singapore in malaysia and then re imported. how can this coury deal most effectively do you think with its natural resources and the diversification process? >>20 years ago i studied this resource curse phenomenon which is a paradox because natural resource wealth should bring other kinds of wealth, but sometimes it brings disaster. and it looks pretty clear that politics is a major part of that paradox; that natural resources are too easy to steal, to easy to grab the rent, sometimes even create civil war. as you fight who really owns that diamond mine, who really owns that oil well. so it's the proper governance of natural resources, realising thatthey are depletable, realising that the goal is to convert
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the resource wealth into human wealth; into infrastructure, into knowledge. that's the real strategy involved. it's transparency, so that it's not a political game of lobbies but actually a proper democratic governance of the nations... resources that's at stake. as long as there's a public awareness that this is the nation's patrimony, it shouldn't be stolen by some foreign investor, it shouldn't be stolen by some narrow political clique; but it should be used effectively on behalf of the whole nation. an accountability foresight, planning and a good ethical commitment that these resources are for the nations well being; putting that together can overcome the resource curse. >>reporter: still to come
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on world business... >>india is home to millions of motorbikes and some of the big brands are making a serious push into a growing luxury sector. >>why english county cricket is failing to bowl over fans, despite the international team's success. >>struggling to hit a six... and the rest in just a moment on world business... >>reporter: expensive motorbikes are on a roll in india, as the country's booming middle classes look for something a little different. the market for most luxury items remains volatile, but firms such as harley davidson and ducati are pushing ahead with ambitious new product launches.
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>>reporter: there's a new kind of beast on indian roads. it's loud, stylish, fast and expensive. >>superbikes are now the new object of desire for enthusiasts in the world's fastest growing two-wheeler market. with engines of 1,000cc and upwards, and costing over 20,000 dollars, they have turned this price-sensitive market on its head. >> i walked into t mall where they had this showroom, i saw the bikes and knew i had to get one. icame back to biking after 20 years - it was always there, but it was on the backburner. >>reporter: meet the hoods, the harley davidson owners of delhi. not as bad as they sound and increasingly common - as the iconic american brand pushes into india, groups like this are springing up across the country.
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>> everyone sees the potential of india, not only in luxury goods, but luxury bikes, luxury cars; everything to do with luxury. because income levels are going up, indians are highly aspirational, affordability is going up. so it just points to greater potential in this segment. >>reporter: just like in established markets the biggest demand is from older professionals buying into the cool biker image. >>ashwani singla is the ceo of a communication advisory firm. he works hard during the week. but hisweekend is off limits, reserved for his passion... >> it's just a different feeling when you've got a machine which is 1,500 cc, and you're riding at 100 plus with the wind on your face on a long ride. it's a completely different feeling, and for me it's a little bit of a reality
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check of my life, because one day on a ride out cleans up your head completely. >>reporter: biking as a stress-buster is gaining traction. this growing demand is also attracting motorcycle manufacturers from japan and europe, bmw motorrad is now selling imported superbikes, through bmw car dealers in 3 major cities. but starting at 37,000 dollars, these motorcycles are not easyon the wallet. >>it cannot be an affordable bike to the common man... those who love speed, those who love adventure, those who are looking into the high lifestyle, we are targeting those people actually. >>reporter: ducati is another company betting big on india. it recently opened its fourth showroom in the country, and it expects sales to more than double this year thanks to the rising demand for performance bikes. >>the indian market is very important for ducati; it... presents a huge option...
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either the size ofthe population and the fact that a large portion of the population has ridden a bike sometime in their life presents a fantastic opportunity for us; and we believe we are strategically a very important market in the future. >>reporter: one thorn in the side of the manufacturers is the high custom duties levied on imported motorcycles. with taxes of 80 percent and more slapped on these bikes, customers are often turned off by the high sticker price. >>it sometimes feels like you're being cheated. you're using a bike two times or three times the price somebody in the west pays. >>reporter: one workaround is to assemble the bikes in india, this slashes prices as custom duties for semi-built motorcycles are lower than those for ready made bikes. the first indian built harley-davidson's have already gone on sale, with two cheaper models being assembled at a new factory in thenorthern state of haryana.
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>>everyone wants to drive their costs down, especially in a price-sensitive region like india... bringing price down, and adding more value is the name of the game, and clearly by localizing operations here you can really make the bike a lot more affordable. >>reporter: cost aside, riding these superbikes still represents a major challenge in many parts of india. the country has one of the worst road safety records in the world, with more than 100,000 people killed every year in accidents. >>the quality of road also needs to be improved. and to top it all, the driving style, the way people ride in india, is pretty different to what you see in the west. >>reporter: so far, the numbers of superbikes sold in india is still miniscule. the presence of the major brands signifies a belief in the market but despite interest from enthusiasts and grabbing theattention of the general public, this has yet to translate
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into sales. >>right now, bikes are used purely for commuting purposes. there's never been a biking culture - theminute people can afford more, they rather jump into a car than spend this kind of money on a superbike. also we just don't have the infrastructure, we don't have the environment, roads are still bad, its still highly unsafe on the roads, and that is amplified when you're on a two-wheeler. so i think clearly there's still a long way to go. >>reporter: for many indian commuters, these superbikes simply make no sense. but for the passionatefew, they are the best thing to reach indian shores... >>reporter: there are few sports that stir an englishman's soul like cricket and the sound of leather on willow is a classic part of the english summer. the country's test team is currently one of the best in the world and has little trouble attracting large crowds to their home games. but for england's professional county teams... it's
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a different story. >>reporter: cricket fans love statistics... so here's one they might find interesting. last year 15 of england and wales 18 counties recorded financial losses totalling around $14m... in a business where income streams are notoriously fickle... >>you do a budget at the start of the year and you keep your fingers crossed you're working on incomes through the gate, depending on the weather, depending on the handouts from the ecb... those kindsof things. a lot of it is out of our control. >>reporter: that's something surrey found last year when it hosted what ought to have been a lucrative test match... >>we hosted the pakistan tour which had alleged match fixing and betting scandals and that kind of negative publicity does have an effect when you're trying to sell tickets to a sporting event... >>reporter: this year yorkshire will host just one day of international cricket... a 50 over match
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that'll be absolutely crucial to the county's annual income... >>how much of your income would be dependent on that day roughly? >>over half. >>on one day's cricket? >>yeah... in terms of what we take through gate receipts, sponsorship and everything else >>reporter: each year england play 7 home test matches... but now there are nine test venues, and mini bidding wars, combined with counties spending up large on ground improvements to better their chances of hosting tests... have come at a cost... >>i think everyone's got caught in a perfect storm. where money's been available to borrow and everyone's been chasing international cricket >>reporter: and the counties are never going to find financial relief through the 4 day county competition... >>yorkshire is in fact one the best supported counties but looking around today, to be honest it looks like there's about 1200 people here... and that's perhaps being generous by about 200. so, while i'm no accountant, i would imagine that today does not represent a big money spinning event for the club.
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>>when you take into account player salaries and everything else county cricket is not an income earner when it comes to the 4 day game >>you do not make money out of county cricket... that is a fact. >>reporter: it's hardly surprising the 4 day game is suffering. squeezed in amongst a variety of formats of the game... matches are now mostly played midweek... and the schedule can be both confusing and unattractive... >>most of the fixtures played early in the season where the weather can be prett average and there's a feeling it's being sidelined certainly. >>starts too early. our next county match is about 2 months down line. >>reporter: one effect of the straightened financial times is that counties are now looking to spendless on salaries, particularly for overseas players. at yorkshire... 10 of the 11 players in this match were homegrown... >>the yorkshire public like to see homegrown players playing in the first eleven, but at the same time we also want to win. so we've got to try and balance development
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with winning. >>develop in one year two years. it's just a conveyor belt. yorkshire will not have to go out and buy anybody. >>i wouldn't want to win a championship with say 5 south africans. >>although it's perhaps an easier policy to follow for the country's most successful county... one with a strong homegrown tradition, 700 cricket clubs and numerous players desperate to don the white rose... >>there's a lot of history that comes with the club... a lot of prestige... and it's a great honour to be part of it. >>it's a great honour and the history of this club. it's a massive achievement to play for yorkshireso yeah it's fantastic. >>reporter: a few years ago 2020 cricket was seen as a financial saviour for the counties... and last year the fixture list was actually extended... but for many counties that didn't equal more money... and this season fixtures have been scaled back again... >>we went from having 10 to 16 20/20 matches and what we found was that we had
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a similar overall gate; it was spread over more games >>it's not about expanding the number of games. it's who plays in those games. it's making those games attractive. >>reporter: even india's showpiece premier league has seen tv audiences fall by a quarter this year... so is the shine already coming off 2020? >>as with any new product it will go in a cycle. so i think... i'm very convinced there's enough substance in 2020 to make sure that it's here for a long time. >>reporter: as for the 4 day game's future... another harbinger of doom may be that as much as waiting for a wicket to fall, many of the crowd here appeared to be waiting for god ... >>we'll all die off there'll be nothing left. >>reporter: one thing that refuses to die... the rumour that some counties may have to merge to savethemselves... >>that's a matter for counties. i think that is something that is available to first class counties at all time but its really a matter for them rather the ecb >>reporter: but some are convinced the ecb, which does have a $32m rainy day fund... will never let a county go bust...
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>>i don't think that will happen... but ithere is it would be for the ecb board to consider as andwhen it happened. >>there's something like 52 football clubs that have gone into administration in the last 10 years. so far there hasn't been a cricket club and i hope that continues. >>reporter: although given current circumstances... that statement about the future of the game may be an optimistic... rather than bold declaration. >>and that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.
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